Development Agency Flouting Law

Connecticut Development Authority: Quasi-public agency should be closed unless it complies with disclosure provisions

(Dean Rohrer illustration )

November 12, 2010

The Connecticut Development Authority is a quasi-public state agency that places bets — with loans, loan guarantees and tax-increment financing — on private companies generally considered too risky by banks. There's a place for the state taking this kind of risk. Economic growth and jobs are the payoff.

Companies benefiting from the CDA largesse must, however, provide the state with certain information: their revenue and their employees' wages and benefits. The CDA, in turn, is statutorily required to share that information with the public. That makes sense. The public has a right to know how effective its investment in a company has been.

The problem is — as exposed in a recent story by The Courant's Jon Lender — the CDA isn't complying with the disclosure law, or at least isn't complying in any meaningful way. The agency's officials say the information is "sensitive," and its release could harm the loan recipients in the marketplace.

That's a policy call, and not one that CDA officials should be making.

State auditors have told the CDA to obey the law or persuade the legislature to change it. Year after year, the agency asks that the law be modified to remove the disclosure requirement, but the legislature — understandably — refuses. The CDA isn't playing with nickels and dimes. In fiscal 2009, the agency approved $45.6 million worth of state help for 56 companies. For that price tag, taxpayers should know how the companies are doing.

The CDA says it tries to find a balance between the public disclosure requirements and the need to protect the businesses the agency assists. For example, it puts the legally required information in its annual reports, but spreads it out so that it's hard to find and understand. Companies are not listed by name in every reference, but sometimes as Company A, Company B and so forth.

Cute — but as State Auditor Kevin Johnston says, the CDA should be straightforward with the information and not make people "go through three hoops to get it."

State agencies, like individuals, don't get to choose which laws they obey and which they ignore. The CDA should fully comply with the disclosure requirement, or else different leaders — those who will obey the law — should be found to head the agency. If all else fails, the governor and legislature should close the CDA's doors.